He writes

I have two teenage sons. One worked all summer and the other sat on his duff. To stimulate the economy, the White House wants to take more money from the son who works and give it to the one who doesn’t work. I can say with 100% certainty as a parent that in the Moore household this will lead to less work.

The Moore household is a small open economy, where imports and exports exceed GDP. Its constituents have almost no internal currency denominated trade and hold no assets or liabilities against one another. It does not have its own central bank. It does not operate in its own currency and its does not float bonds backed by the Central Bank in whose currency its bonds are denominated.

These are important characteristics of the Moore household that do not apply to the US economy. I only have a few minutes but lets start the thought of experiment of slowly, one by one applying the characteristics of the US economy to the Moore household.

The question should never be Theory vs. Common Sense. It should be what factors do I have to include to make theory and common sense overlap.

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